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‘Balanced budget’ set to script next chapter of India’s spectacular growth story

Business leaders and prominent non-resident Indians in the UAE applauded the budget

Business leaders and prominent non-resident Indians in the UAE applauded the budget presented on Tuesday by Finance Minister Nirmala Sitharaman as a balanced, futuristic and growth-oriented budget that will help chart the future course of an emerging global economic powerhouse.

They expressed optimism the key proposals of the Modi 3.0 budget would be transformative, taking the world’s most populous nation's villages, poor and farmers on the path of prosperity while fostering inclusive growth and economic resilience. Indeed, a budget for every Indian.

Following are excerpts from their comments:

Yusuffali MA, chairman of Lulu Group: A very futuristic and proactive budget with huge emphasis on boosting entrepreneurship and inward investments. Simplification of Foreign Direct Investment (FDI) rules & promoting the usage of Indian rupee for investment overseas is a very interesting move. Abolishment of angel investment tax is going to be a big game changer, further boosting India’s image as a global Start-up hub and bringing in a new era of all round economic growth across all key sectors.

Dr. Azad Moopen, founder & chairman, Aster DM Healthcare: With 66 per cent of the Indian population still under the age of 35 and an estimated 7-8 million youth entering the job market annually, the budget provides a much-needed impetus to advancing employment opportunities and youth upskilling, supported by focus on comprehensive development for the country. Although healthcare did not seem to have a major focus this time, it is promising to see the 12.5 per cent hike in budget allocation for the sector. The government is taking bold strides, including the establishment of new medical colleges, the promotion of vaccines for cervical cancer, expanded maternal and childcare schemes.

PNC Menon, chairman of Sobha Realty: The budget gives a renewed focus on the real estate and infrastructure sector, addressing key areas including housing for urban poor and the redevelopment of cities. The proposed revision of stamp duties is expected to make property registration more affordable, particularly benefiting women. The focus on rental housing in industrial parks via the PPP model is a welcome move while the digitization of land records in cities will greatly improve transparency and ease property transactions.

A.P. Hinduja, chairman, Hinduja Group of Companies (India): The budget shows Modi 3.0 is all about continuing the path to fiscal consolidation with the fiscal deficit target of 4.9 per cent this year and 4.5 per cent the next while maintaining the Capex figure at 3.6 per cent. The focus on the agri sector and housing infrastructure - affordable and urban - is substantive and augurs well. Quite a few changes in taxation have been announced which needs a detailed study. Higher FDI is expected with a reduction in tax on Foreign Companies from 40 to 35 per cent. Overall, a good budget for the macro Indian Investment Climate but could have been better for Indian Investors.

Paras Shahdadpuri, chairman, Nikai Group: The budget has pronounced nine priorities and has laid long-term strategy demonstrating a forward-thinking and inclusive approach to driving India’s growth. The focus on employment and skilling is particularly commendable, with initiatives set to empower a significant number of youths through substantial financial outlays. The attention given to MSMEs and the manufacturing sector is a significant step towards bolstering India's industrial backbone. The credit guarantee schemes, technology support packages, will provide the much-needed impetus for MSMEs to thrive.

Adeeb Ahamed, managing director of Lulu Financial Holdings: The budget is a thought-provoking one that balances the needs of today while establishing the priorities of tomorrow. At the same time, one could always view it as a budget that could have done more to address immediate concerns. The focus on promoting entrepreneurship, skilling and MSMEs is commendable. The initiatives to ensure credit access to MSMEs during their stress period and increase the limit in MUDRA loans are welcome steps.

Faizal Kottikollon, chairman, UAE-India Business Council, UAE Chapter, and of KEF Holdings: The budget will give new scale for education and skills and a new route to progress for small traders, and MSMEs, while helping to create millions of jobs through employment-linked scheme. It is also expected to boost opportunities for the innovation ecosystem and startups. Exemption on cancer medicines from basic customs duty and cuts on the import of medicines and equipment seeks to foster inclusive growth in the healthcare sector and bridge the rural-urban divide.

Siddharth Balachandran, chairman of Indian Business & Professional Council Dubai, and Buimerc Corporation: A very good budget considering the fiscal deficit target reduction. I am enthused by the tax slab changes as well. This will put more money into the hands of the common man, which will automatically enhance the stimulation of the economy by increased spending by a large quantum of the population. The capital gains tax for both listed and unlisted has been made 12.5 per cent, which is a good development. Overall a good balance between spurring the economy and populist measures.

KV Thomas, chairman, Thomsun Group: The increase in long-term capital gains tax could have been avoided as it is not expected to significantly impact market sentiment. This policy shift is likely to weigh on investor sentiment in the short term, leading to higher market volatility than seen in the recent past. The focus on job creation and boosting consumption is poised to benefit key sectors such as consumer goods, real estate, and automobiles.

James Mathew, CEO & managing partner, UHY James: The budget is not big on policy changes yet it encapsulates key areas within the Indian economy that require care and concern. Reduced corporate tax on foreign companies to 35 per cent from 40 per cent is expected to benefit foreign-owned foreign-controlled companies (FOCC) and drive parity between domestic and foreign company tax rates. While the budget does not set out to please stakeholders involved, it takes into account aspects within the economy that require due care, attention and reform and aims to transform the economic landscape positively for the long haul.

Thumbay Moideen, founder president, Thumbay Group: I welcome the progressive measures introduced in the Indian Budget 2024, which mark a significant step forward in strengthening the country’s healthcare system. The government's all-inclusive approach, which includes upgrading hospital facilities, expanding medical colleges, and introducing essential health initiatives such as integrated maternal and child care and the HPV vaccination for cervical cancer prevention, reflects a holistic commitment to improving public health outcomes. Additionally, the decision to exempt cancer medicines from basic customs duty is a ‘pivotal move’ to make life-saving treatments more affordable and accessible, addressing the rising challenge of chronic diseases.

V. Sivaprasad, chairman and CEO of Condor Developers: Further reductions in duties for properties purchased by women will bolster the housing sector. Initiatives such as financial assistance for urban housing and provision for more houses under PMAY scheme are key initiatives aimed at addressing the housing needs of urban poor and middle-class families

Kamal Vachani, group director & partner, Al Maya Group: The budget’s emphasis on bolstering domestic manufacturing, coupled with strategic tax incentives, creates a promising landscape for the industry’s growth. Reduction in customs duties on mobile phones, chargers, gold, and silver will stimulate consumer demand and also provide a substantial boost to domestic manufacturers by lowering input costs. The reduction of import duty on gold will also help curtail smuggling.

Dr. Dhananjay Datar, chairman & managing director, Adil Group of Supermarkets: The finance minister’s focus on reducing the prices of essential commodities, such as food items, is a welcome move. This could translate to a more stable pricing environment for the goods India imports and exports. Additionally, initiatives aimed at controlling inflation and enhancing employment opportunities are crucial. These measures are likely to bolster consumer spending power in India, potentially increasing demand for a variety of food products.

Surender Singh Kandhari, chairman, Al Dobowi: A very balanced budget supporting new jobs, supporting new investments, and promoting growth to achieve our goal to be the third largest economy in the world.

Sukesh Govindan, CEO of 10X Properties: The targeted measures to further push real estate growth and unlock its full potential is a welcome move. The government's concentrated efforts on infrastructure development promise to significantly enhance housing demand and benefit around 250 ancillary industries, generating numerous job opportunities and bolstering overall economic growth. The announcement of PM Awas Yojana 2.0 aims to meet the housing needs of one crore urban poor and middle-class families, a significant step towards ensuring housing for all

Sunny Kulathakal, chairman of Global Organisation of People of Indian Origin (GOPIO): A growth-oriented budget that has delivered short-term demand stimulus and actions focused on medium to long-term growth imperatives while maintaining fiscal discipline. The budget is inclusive, with a strong thrust on quality job creation and skilling. It also strikes a balance between agriculture and manufacturing, with elements of services.

Navin Kapoor, owner & MD Xpertize United: Modinomics is evident in budgetary allocations for green energy and technological innovation like AI, machine learning, blockchain, and IOT. A Capex outlay of 3.4 per cent of GDP will spur infrastructure development at a record pace. Commitment to become net zero by 2070 is evident from outlays in e-vehicles ecosystem, hydrogen fuel, and green energy.

K V Shamsudheen, founder director of Barjeel Geojit Financial Services: The budget seeks to promote green energy, agriculture, SMEs, startups, and women empowerment and gives special attention to states like Andhra Pradesh, Bihar, Assam, and Sikkim. The positive changes made in the personal tax regime are welcome.

Anurag Chaturvedi, CEO of Andersen UAE: This year's budget has focused on the middle class and MSME's. The raising of tax slabs, increase in the standard deductions, and simplification of capital gains tax are indicative of that policy. The abolition of the angel tax and the reduction of tax rates for foreign companies to 35 per cent should also incentivise growth.

Suresh Kumar, Chairman Emeritus, IBPC Dubai & Founder, Tricolour Values Group: Nirmala Sitaraman, the Indian Finance Minister has unveiled a budget that progresses the fiscal responsibility ‘glide path’ admirably; keeping the deficit down to 4.9%.

The numerous special schemes have a broad theme of focussing on the four “castes “ defined by the Prime Minister ie the poor, women, youth and the farmer. This focus is eminently justifiable.

The speculative bubbles building up in the F&O as well as secondary stock markets are sought to be deflated by a stepped up capital gains and transaction taxes. Coalition compulsions have resulted in generous packages foe Andhra & Bihar.

Simplified tax and FDI regimes are on the anvil. All in all a comprehensive fiscal endeavour to sustain growth and momentum.